They exit the midpipe after the H crossover, so after the cats.
As far as laws for mufflers, some places enforce noise ordinances more than others, but a lot of people in Texas run muffler deletes/straight pipes.
Also, the typical drive thru type inspection place doesn't have lifts, so on a Mustang, they won't make the effort to visually inspect the exhaust system for the retention of cats. As long as your tune is okay, pretty sure you will pass the tail pipe sniffer.
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